Bitcoin Rebounds to $105K After Moody’s Downgrade, 21Shares Sees Rally Toward $138K

Cryptocurrencies staged a sharp recovery Monday as global markets brushed off the shock of Moody’s downgrade of U.S. sovereign credit, with Bitcoin rebounding above $105,000.

After an early session dip to $102,000, BTC reversed losses and climbed 0.4% over 24 hours, bolstered by resilient risk sentiment and renewed institutional interest. Ether also advanced, gaining 1.2% to move back above $2,500.

While the CoinDesk 20 Index remained mixed, Aave (AAVE) outperformed the broader altcoin market. Solana (SOL), Avalanche (AVAX), and Polkadot (DOT) posted modest losses despite paring back earlier declines.

U.S. equities followed suit, with the S&P 500 and Nasdaq turning green as investors looked past the U.S. credit rating cut. Moody’s downgraded U.S. debt from AAA status late Friday, sending Treasury yields sharply higher. The 10-year note breached 4.5%, while the 30-year yield surged above 5%.

Still, analysts suggested the downgrade’s impact would be more psychological than structural.

“Markets had largely priced this in. It’s not a game-changer,” said Ram Ahluwalia, CEO of Lumida Wealth. “Some short-term repositioning among institutional holders of AAA-only assets is possible, but the long-term implications are minimal.”

Ritholtz Wealth Management’s Callie Cox echoed that sentiment on X, calling the downgrade “long overdue” and noting that market participants weren’t reacting with panic.

Meanwhile, optimism continues to build around Bitcoin’s trajectory. 21Shares, a leading crypto ETF provider, sees the potential for BTC to rally as high as $138,500 this year.

“Bitcoin’s current momentum isn’t driven by hype, but by fundamentals,” said 21Shares strategist Matt Mena. “We’re witnessing sustained institutional inflows, tight supply conditions, and a more favorable macro backdrop.”

Spot Bitcoin ETFs have consistently drawn more BTC than miners produce, deepening supply constraints. The report also highlights growing interest from corporations and governments looking to build strategic BTC holdings.

Mena estimates that these combined forces could push Bitcoin roughly 35% higher in the coming months, potentially ushering in a new all-time high before year-end.